Case 1 – Importance of MVP for product launch – Airbnb

You might be thinking of launching a product soon or come up with a new concept into the market. To be successful, its very important to understand the concept of MVP. You need to make sure that the MVP is launched and customers experience it. This helps in validating the idea with the potential customers.

One of the most important things is to find the right MVP. MVP doesn’t mean a product which is not even able fulfill the basic functionalities or has known bugs. Understanding and finding the right MVP for your product is very important to gauge the market.MVP

We need to break the product into smaller batches which are deliverable and also provide the right preview of the product. Continuous testing is very important to the customers. We need to have an incremental improvement of the product and the same should be validated with the customers. If we try to create the complete product in a single shot, it will always lead to a lot of deviation from the customers’ expectation. This, in turn, increases the risk of failure of the product.

Let’s dive into a case study to understand how product launches have happened for successful products.

Case 1 – Airbnb

Founding of Airbnb

Airbnb started in 2007. How it started is an even interesting story. The founders of Airbnb, Brian Chesky, and Joe Gebbia had moved to San Francisco. They didn’t have any job at that time and it became difficult for them to pay rent.

There was an industrial conference at that time in San Francisco. Almost all hotels were booked and still, people wanted the place to stay. This is when the founders saw an opportunity and bought 3 air-mattress. They thought of providing air mattress and breakfast to people. They created a basic website for people to book. And soon they had 3 people who were willing to pay and stay at their place. They charged $80 for each night.

With this idea in mind, if we think about the features of the product which will be required to launch they can be –

  • Images of the accommodation
  • Map location of the place
  • Price of the place
  • Reviews of the owner
  • Reviews of the place
  • Information on places to travel in the city/tours
  • Search functionality
  • Categorization of homes etc.

However, if we think about the most basic features which will be required to run this, they will be – images of accommodation, the location of the place, price and an ability for people to contact the place owner.

Airbnb v1 –

This gave them an idea to start this business by providing air-mattresses and breakfast. Their website allowed people to upload their place’s photos and provide shared accommodations for visitors. It was a basic website which just provided simple functionalities with location and the place.

This is how the initial website of Airbnb looked like –

Airbnb launch websiteAirbnb launch mapsAirbnb launch search

This website provided them with the validation of their idea. They now knew that there are a lot of people who want to earn extra cash and at the same time quite a lot of visitors were willing to stay at these places. They knew that they could take this idea further.

This product clearly shows the focus on the basic features and how this was used as MVP to validate the idea.

Airbnb v2 –

Even with this idea, they could not succeed. Their earnings got stagnant and they couldn’t grow. They tried to understand why more customers are not interested in these accommodations. Upon research, they found that it was due to the bad quality of images uploaded by people. This is when they decided to go around in New York City and capture photos of places themselves. This improved the quality and led to growth in revenue. Soon their business increased from $200 a week to $400 a week.

As such nothing was changed in the product, but they provided better functionality. Quality of images is a performance feature which provides more reliability to visitors about the place they will have to stay in. Since it was missing in v1, it led to stagnancy. With the improvement in this feature, the product saw growth.

Airbnb v3 –

While they were experimenting with their idea, one of the owners posted a full house as a listing. The full house listing saw a lot of interest from the people and this is when Airbnb thought of changing its focus to provide full houses to visitors. This saw tremendous growth in their business and the valuation of the firm.

The phase-wise growth of their product allowed them to change their focus from shared accommodation to full house/flat accommodations.

how Airbnb started

Since then, Airbnb has improved on all their features. Provided all the features such as great design, supplementary features such as experiences etc. Their journey is a great example of how MVP should be made and how a good MVP can lead to the success of a product.

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